When PA Workers’ Compensation Insurer Is Not Bound By Stipulation

When we litigate cases in the Pennsylvania workers’ compensation system, we often resolve such matters through a Stipulation of Facts.  This agreement of the parties is then approved by a Workers’ Compensation Judge (WCJ) and has the same effect as any other decision of a WCJ.  This kind of resolution often can resolve disputes quickly and easily, saving the parties the time and effort of unnecessary litigation.

Once a Stipulation of Facts is approved by a WCJ, and the appeal period passes, it can no longer be disturbed.  Maybe. A recent decision by the Commonwealth Court of Pennsylvania addressed a situation where it was necessary to set aside a Stipulation of Facts after it was approved by a WCJ.

In VNA of St. Luke’s Home Health/Hospice, Inc. v. Elizabeth Ortiz (Workers’ Compensation Appeal Board), the injured worker hurt her left shoulder at work in 2017.  The workers’ comp insurer accepted the injury as a “left shoulder strain.”  Believing her injury was more significant than that accepted, the injured worker filed a Claim Petition (though it seems more in the nature of a Petition for Review), alleging additional diagnoses.  Based largely on the testimony of the injured worker, that there were no issues with the left shoulder before the 2017 work injury, and the medical records stating the same, a Stipulation of Facts was reached, expanding the work injury to include “a left rotator cuff tear and biceps tendon injury.”  The Stipulation of Facts was approved by a WCJ in 2019.

Subsequent to the Stipulation of Facts being approved, while litigating a later Petition for Modification, the worker’ compensation insurer became aware of medical records showing that the injured worker had a prior left shoulder injury several months before the 2017 work injury.  As part of the litigation, the insurer sought to set aside the Stipulation of Facts.  A decision was issued by a WCJ granting the Modification Petition, but denying the request to set aside the Stipulation of Facts.  On appeal to the Workers’ Compensation Appeal Board (WCAB), this decision was affirmed.

On further appeal to the Commonwealth Court of PA, this aspect of the decision was reversed.  The Court found it disingenuous for the injured worker to argue that the workers’ compensation insurer did not properly investigate the medical status before agreeing to the Stipulation of Facts, since the injured worker was found by the WCJ to have lied in her testimony (under oath) as well as to her treating physicians (denying any past medical history for the left shoulder).  The Court disagreed with the WCAB, who had found that the insurer had ample opportunity to investigate the claim before executing the Stipulation.  Since the injured worker misled the WCJ, and her own treating doctors, there was no expectation for the insurer to have conducted a more thorough investigation under these facts.  The Court also pointed out that the insurer was not attempting to deny the claim entirely, as that would have required a different analysis.

Even though we represent injured workers, and we do so zealously, we also are completely committed to honesty and truthfulness in all aspects of litigation.  We believe the Court gave the “right” decision here, as to do otherwise would reward lying and misrepresentation, and punish the insurer for accepting the word of the injured worker and her doctors, at face value.  To hold otherwise could have caused unnecessary delay and complication in future cases, as insurers could become hesitant to accept any evidence relying on the word of the injured worker.